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Question
What is meant by insurance?
Answer in Brief
Solution
- A promise to compensate for future losses in exchange for a periodic payment.
- Insurance protects individuals, businesses, and other entities against financial losses. Certain types of insurance are mandated by law, while others are voluntary.
- Accepting the terms of an insurance policy forms a contract between the insured and the insurer.
- The insurer agrees to pay the policyholder a sum of money if a certain event occurs in exchange for premium payments from the insured.
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